Zacks Small Cap Research – ORMP: Balance Sheet Strong, Potential Benefits of Investments, JVs, Buybacks – Technologist

By M. Marin

NASDAQ:ORMP

READ THE FULL ORMP RESEARCH REPORT

Solid cash & equivalents position as former CFO resumes role…

Oramed Pharmaceuticals (NASDAQ:ORMP) has named its former Chief Financial Officer to the CFO position again. In June 2024, the company named Avraham Gabay as CFO, Secretary and Treasurer to replace former CFO David Silberman. Mr. Silberman had announced his intention to resign effective July 12, 2024, citing personal reasons. Mr. Gabay served as CFO at Oravax Inc., a 63% owned Oramed subsidiary, from 2021 until 2023 and as ORMP’s CFO from 2019 until 2021. He also has extensive outside public company and accounting experience, having been interim CFO at BiomX Inc. (NYSE American: PHGE) from 2023 until 2024 and VP Finance at Orcam Technologies Ltd. prior to that from 2015 to 2019, among other senior roles.

He resumes his position as CFO at a time when Oramed believes it has the financial flexibility and balance sheet to continue development activities and initiate a share buyback. In fact, at the end of 2Q24, Oramed had about $153 million in cash and equivalents to advance its development efforts and other initiatives, including investments, compared to about $162 million at YE 2023.

Cash position strengthened by Scilex repayments on senior secured note…

Oramed’s strong cash position is further augmented as Scilex Holding Company continues to make payments per the companies’ repayment schedule. Scilex is a biopharma company focused on acquiring, developing, and commercializing non-opioid management products to treat acute and chronic pain. In September 2023, Oramed entered into a securities purchase agreement with Scilex under which Scilex issued ORMP a roughly $102 million promissory note collateralized by most of its assets, plus penny warrants to purchase Scilex shares. Repayment of principal began on December 21, 2023 and through June 26, 2024, Oramed had received $40 million of principal repayment. The next payment installment is scheduled for September 2024.

Enabling company to repurchase shares under new buyback authorization

Separately, on June 26, 2024, Oramed announced that its board has authorized a stock buyback program of up to $20 million of ORMP shares. The company has indicated that it might repurchase shares at times, depending on market conditions. Given the cash balance noted above, we expect the company has sufficient capital to maintain share repurchases and continue to advance its strategy.

As company continues development initiatives, new Phase 3 Oral Insulin protocol planned

Having completed an analysis of data from a terminated U.S.-based Phase 3 trial of ORMD 0801, ORMP learned that subpopulations of patients with pooled specific parameters responded well to oral insulin. The subpopulation included patients with specific parameters such as body mass index (BMI), baseline HbA1c, age, gender and body weight. These subsets exhibited an over 1% placebo adjusted, statistically significant reduction in HbA1c. As a result of this analysis, ORMP evaluated potential ways to advance its oral insulin candidate, as well as other assets in its existing pipeline.

The company’s discussions with the FDA are progressing as it plans to launch a Phase 3 oral insulin trial in the U.S. under a differentiated protocol aligned with this positive data. The planned new Phase 3 protocol would represent a fine-tuned approach strategically focused on the specific patient subgroups identified as significant responders following the company’s analysis of both Phase 2 and prior Phase 3 data. ORMP hopes to leverage its analysis in order to optimize the potential for successful outcomes of a new Phase 3 trial to advance its oral insulin therapy in diabetes management.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.